There is a clear need to reduce regional imbalances in the UK economy, a need which has been recognised in the launch, nearly two years ago, of the Northern Way initiative, a 20-year, £100m project headed by the three regional development agencies in the North.

Two weeks ago, the chairman of the Northern Way, Neville Chamberlain, informed a Treasury seminar that the North is no longer in decline, with growth outstripping other regions in the UK.

It was reported that growth in the three North of England regions between 2000 and 2004 was 22.9 per cent, against a "rest of UK" average of 22.8 per cent.

This is good news, but there is an awful long way to go.

Given the performance of the financial services sector in London, it is likely that the North will again be shown as lagging when the figures are next published in December, and the North has not made up the ground lost in the 1980s and 1990s.

There are also huge variations within the northern region.

In the period 2000-2003, some areas have growth rates well above the national average, including North Yorkshire, East Riding, East Merseyside, Darlington and Northumberland.

However, other areas had growth rates below 13 per cent, including the Tees Valley, Durham, West Cumbria, Blackburn with Darwen, Cheshire, Blackpool, York and Bradford.

Competition between regions, like competition generally, can be healthy and lead to innovation and economic growth.

However, the scale of the imbalances in the UK is profoundly unhealthy and can lead to a London-centric view of the world, having a particular influence on house prices and interest rates. It is in all our interests that the Northern Way is successful.

It is also important to recognise the sheer enormity of the problems that northern regions face and recognise that, despite everyone's best efforts, regional and intra-regional differences may widen rather than narrow over the next two decades.

Professor John Wilson is Dean of Teesside Business School, at the University of Teesside in Middlesbrough.